Unum Group Corp. did well during the third quarter, but its group disability insurance operations ran into turbulence.
Unum, Chattanooga, Tenn. (NYSE:UNM), is reporting $206 million in net income for the latest quarter on $2.5 billion in revenue, compared with $221 million in net income on $2.5 billion in revenue for the third quarter of 2010.
At the individual disability closed block, operating income increased to $14 million, from $9.8 million.
At the Unum US unit, the group disability business is reporting $72 million in operating income on $509 million in revenue, compared with $78 million in operating income on $514 million in revenue for the comparable quarter in 2010.
Claims costs rose a little, to 85.5%, from 84.6%.
Sales of fully insured long-term disability (LTD) products actually increased 4.3%, to $22 million, and sales of fully insured short-term disability (STD) products climbed 7.8%, to about $12 million.
But holding on to group disability revenue was difficult, even though persistency – the likelihood that an employer would renew its coverage – increased to 88.7%, from 88.4%.
Revenue was soft because of “ongoing price competition” and “challenging economic conditions,” Unum says in a discussion of its earnings.